any such public work of internal improvement yields or can yield permanently a profit of more than twenty-five per cent upon its cost.

It remains to be seen whether the Darien ship canal will be more productive. It is certain, however, that every dollar of revenue that either the United States of America or the United States of Colombia can derive from the canal will be a tax, serving to abate its effectiveness for the purposes for which it is designed. If there are capitalists who would invest their money in constructing this canal with the purpose of affording direct revenue to either the United States of America or the United States of Colombia, it is believed this is the first instance where capitalists have ever shown so great devotion to any government. The principles of political economy which prevail in the United States of America forbid, and will continue to forbid, this Government from ever taking even one dollar of net revenue from the construction of any channel of navigation or transport.

In opposition to such a policy the United States of America encourage capitalists by offering them adequate and liberal rewards, and by reducing profits encourage business upon artificial highways. Government revenues are only expected to be derived from the increase of values and production which result from the construction of such works. The Government of Colombia is invited to consider whether it is not impracticable for it to construct works of improvement upon principles different from those which are here perhaps too sharply expressed.

If it shall turn out that we are mistaken in our present anticipation that the work shall prove sufficiently productive to yield revenue for the two Governments, Article VII, as originally prepared, reserves for consideration after that the development should be made the proceedings to be adopted for the division of those profits.

3. The commissioners propose (1) a stipulation that the annual expense of the undertaking shall in no case exceed thirty per cent of the annual proceeds without the consent of both contracting parties; (2) that the net proceeds of the undertaking corresponding to the United States of America shall be preferentially applied from the first year to the reimbursement of the capital invested; and (3) that to determine the net proceeds of the undertaking no deduction shall be made for interest on the capital invested in the work, nor for the amount destined as a reserve for the sinking fund.

Upon careful inquiry, I am satisfied that the restrictions thus proposed would defeat a subscription of the necessary capital for the construction of the work.

On the subject of this article generally, I may be excused for saying that the United States of America have been able to secure the undertaking of the Pacific Railway, now in such prosperous progress, through the territory of the United States only by allowing to capitalists guarantees more liberal and promises of reward more munificent than those which are stipulated in this Article VII, as now invested upon, with a view to the construction of a ship canal by capitalists of the United States in a foreign and distant country.

ARTICLE VIII.

The United States of Colombia shall retain their political sovereignty and jurisdiction over the canal and the territory pertaining thereto, but they shall not only allow, but guarantee, according to the constitution and laws of Colombia, the peaceable enjoyment, control, direction, and management of the same, as before specified.

PANAMA CANAL.

EXPLANATIONS.

The amendments proposed by the Colombian ministers to Article VIII seem reasonable, and are accepted.

ARTICLE IX.

The United States of America and the United States of Colombia shall have right to use the canal for the transportation of troops and munitions of war, but no other nation shall have such right without the consent of the two contracting parties, and in case of war, in which neither the United States of America nor the United States of Colombia shall be parties, the canal shall be neutral to all other nations.

EXPLANATIONS.

The projected treaty comes back with the words, "rejected by Colombia," written opposite this Article IX. No explanation for the rejection has been communicated.

By expunging that article the treaty would leave the proposed ship canal to become a common military road for the transportation of armies, and of military and naval munitions, by all belligerents of whatever nation they might be.

If it may be supposed, by way of illustration, that Great Britain and France are belligerents in the East, or that China in the East and Great Britain in the West, or that Austria and Prussia, or that Spain and the South American Republics, or that Russia and Japan should become belligerents, and that there might not only be one war between some of those parties at one time, but half a dozen wars prosecuted among so many belligerents at the same time. In that case, according to the view of the Colombian convention, not only one of those belligerents, but both the parties engaged in one actual war, and, indeed, all the parties engaged in all the conflicts concurring at the same time would have a right to use the Darien ship canal as a military road.

Is it to be supposed that those belligerents, in the heat of conflict, would conform themselves to the regulations which the United States of America might establish for the use of the canal, or would submit themselves to the laws and police of the United States of Colombia in the use of it for such hostile and probably fatal purposes?

One of the two belligerents might think it would gain an advantage over its enemy by burning the ships that were carrying munitions and troops through the canal; another, or a confederacy of others, might think it would be advantageous to their cause to destroy the canal itself. Is Colombia able and willing to guarantee to the United States of America the maintenance of the neutrality which she thus proposes to all belligerents?

What inducements does Colombia offer to the United States of America to give such guarantee on their part?

Even though one of the belligerents should be at war with Colombia itself, the Darien Ship Canal must nevertheless be neutral.

The armed enemy of Colombia must be allowed to introduce his armies through the terminal ports and the canal to the very capital of Colombia, and to substitute itself in the place of Colombia as depositary of the key which unlocks the American continent to the ambition of foreign powers.

The United States of America have less reason, perhaps, than any other nation has now or ever has had to desire, fear, or expect to be

engaged in war with any foreign State; but can the Republic of Colombia expect, in the event the European States should attempt singly or by confederacy to overthrow republican institutions and to restore by force imperial or despotic power in the American continent, that in such a case the United States of America would allow a public enemy of the American continent the use and advantage of a work constructed by two American nations? Even if the two nations were to be so shortsighted as to leave such advantages open to an enemy of either or both nations, the capitalists of any country who should be invited to engage in constructing a canal would instinctively decline to grant the solicited investment. Article IX, as originally submitted, carefully consults the sovereignty, integrity, and safety of the United States of Colombia, while in case of war it saves all necessary advantages to both countries.

The Secretary sincerely hopes the Colombian ministers will reconsider their rejection and accept the article.

ARTICLE X.

Colombia shall impose no tolls or duties of any kind on vessels, passengers, money, merchandise, and other objects which may be conveyed through the canal from one ocean to another, but such effects as may be destined for home consumption or trade in Colombia, shall be liable to such duties as are or may be established.

EXPLANATION.

The amendments proposed by the Colombian ministers are accepted.

ARTICLE XI.

Notwithstanding what is before said of guarantee, if a military or naval force shall be at any time found necessary to maintain the protection and service of the canal, it shall be maintained at the equal expense of the contracting parties.

Either party failing to contribute its proportion of such force shall indemnify the other for excess of force and expenditure.

EXPLANATION.

The Colombian ministers have raised no objections to this article, and it stands as originally drawn.

ARTICLE XII.

The neutral rights and privileges herein before specified shall continue for the period of one hundred years after the canal shall have been brought into operation, at the end of which time the canal and its appendages and appurtenances shall revert to the United States of Colombia, on their paying to the United States of America an amount equal to the original cost of the survey, location, and construction of the canal and expenditures for the same, deducting any net profits that shall have been received by the United States of America exceeding an interest of ten per cent.

EXPLANATION.

We have carefully considered the amendments proposed by the Colombian ministers and are of opinion that they could not prudently be accepted. The whole article is rather visionary than practical.

The reversion of the canal to the United States of Colombia is delayed an hundred years. No one now living can foresee the financial, political, and social condition which will exist in the two countries at that distant period. Indeed, it is very probable that such changes may

occur in both countries that the parties will, by common consent, agree more than once to modify the agreements now made long before the period assigned.

It may be foreseen that such modifications will be desired by the Republic of Colombia if it shall go on increasing in resources, population, and strength, as it is to be hoped it may. The terms of revision mentioned in Article XII were fixed in anticipation of some such early reconstruction of the agreements, rather than with a view of their being insisted on only at the end of one hundred years. What seems conclusive upon the subject is that capitalists could not be expected to invest funds in such an enterprise with a condition of a future surrender of their property in the canal unless they had reason to expect that they should be allowed by the Government to realize 10 per cent upon their investments if they shall find it possible.

ARTICLE XIII.

The United States of America may by law devolve all its rights, franchises, and duties, property and obligations touching survey, construction, or preservation of the proposed canal herein contained upon any individual citizen or incorporated associations of citizens of the United States, and in that case such citizen or citizens shall enjoy all the rights of property and privileges, and be subject to all the obligations and engagements herein contained, and they shall always be subject to the control and direction of the United States of America as declared by law. But the political obligations herein assumed by the United States of America and the United States of Colombia are permanent and indefeasible.

EXPLANATIONS.

We feel obliged to disallow the amendments proposed by the Colombian ministers, and to insist upon the article as it was originally written. 1. The amendments of the Colombian commissioners are supposed to have arisen under a very natural misapprehension of facts and circumstances. The commissioners seem to suppose that the United States of America stand not only well disposed but fully prepared and impatient to commence, prosecute, and complete the projected ship canal by a direct application of executive and administrative powers and faculties. It must have been this belief on the part of the Colombian ministers which induced them to propose that the United States of America shall not at all devolve the construction of the canal upon any private company, and that the care and conduct of the canal itself shall not be devolved upon any such company until the canal shall have been fully constructed and brought into operation. It is supposed that the commissioners persisted under the same belief in prescribing contingent forfeitures of the rights of the anticipated company. Frankness on the part of the United States requires me to say that in regard to these important points the Colombian ministers are acting under a grave misapprehension. The territory of the United States is full of canals and railroads and other works of material improvement. The length of canals in this country is measured by thousands of miles, the length of our railroads by tens of thousands of miles. Nevertheless there is not, and there never was, within the territory of the United States of America one mile of railroad or canal which was directly constructed by the Government of the United States of America, or over which the United States of America exercises directly rights of property or control.

The United States construct only fortifications and other works of

military strategy or defense, and navy-yards, light-houses, customhouses, and the like. Every work of internal improvement in the United States has been made either by States or by corporate companies or by private individuals. What the Government of the United States do and always do in regard to such works of internal improvement is to accept or sanction such enterprises when undertaken by the various States or by corporate bodies or by private individuals, and lend them aid by way of compensation or loan or protection, with other practical encouragement. The Government of Colombia is familiarly acquainted with the Panama Railroad, which was made and is owned by a corporate company of the United States of America, and enjoys only the recognition, sanction, and protection of the Government of the United States.

Even the Pacific Railroad, which, although incomplete, nevertheless stretches near halfway across the continent at its widest part, was begun and has been thus far prosecuted, and will be prosecuted to the end, by corporate companies so encouraged and patronized by the Government.

Precisely the same course of proceeding is contemplated by the present convention in regard to the Darien Ship Canal. It is believed that no other mode of proceeding in regard to the construction of the proposed canal could secure the assent or approbation of the Congress of the United States. It would be easy to show that this indirect mode of proceeding would tend greatly to the security and advantage of the United States of Colombia. Private citizens of the United States and corporate companies created under their laws may be expected to be held by proper obligations to respect and obedience of the laws and authority of the United States of Colombia. On the other hand, I am unable to conceive of any proceeding that could be more perilous to the United States of Colombia than that one should allow a stronger Government like that of the United States to become directly the proprietor or conductor of a ship canal with free ports at its termini on the two oceans.

If, contrary to these views of the case, the Colombian Government shall continue to regard with disfavor the construction of the canal by a company or associations under the laws of the United States, and with their sanction, then the present negotiation may be immediately brought to an end.

I trust, however, that the practical view which I have suggested will be accepted by the United States of Colombia, and that they will not insist upon their proposed amendment, which denies to the United States Government the privilege of devolving the work of constructing the canal upon individuals or upon a corporated company.

2. This explanation having been made, it is not thought unlikely that the Colombian Government will assume that already some private individuals in the United States have organized themselves into an association, or that such individuals are now standing ready and eager to accept the powers and privileges which are to be stipulated in the present treaty and to engage with the necessary capital in the construction of the Darien Ship Canal. If this expectation has been or shall be formed it should be dissipated promptly.

Engineers the best qualified and informed estimate the cost of constructing the Darien Ship Canal at one hundred millions of dollars in gold, and they calculate that it involves a sacrifice by pestilence and